A rocket plume impinging on the lunar surface when a lunar lander approaches a landing site can cause significant dust dispersal. This study investigated the near-field rocket plume-lunar surface interaction and subsequent regolith erosion and particle dispersal. These subjects are challenging because of the complicated flow physics associated with the inherently multi-physics multi-scale problem, and the special lunar conditions, characterized by micro-gravity, near-vacuum, extreme dryness, and the unique properties of the regolith. Gas expansion into the near-vacuum lunar condition compared to exhaust gas under terrestrial circumstances varies not only in the shape of plume but also in the pressure profile on the surface. To understand the effect of surface erosion on flow characteristics, in conjunction with the finite volume method of plume impingement of a rocket nozzle, the Roberts erosion model was introduced for the influx mass flow rate of dust particles based on excess shear stress. The particulate phase was then handled in a Lagrangian framework using the discrete phase model. A parametric study on erosion rate was also conducted to examine the effect of particle density, particle diameter, Mach number, and hover altitude. Additionally, the maximum speed and inclined angle of the particles from the surface were computed for various particle diameters and hover altitudes. The resulting information about the pressure and heat flux distribution on lunar module components can be used for engineering design. Finally, high-fidelity simulations of particles eroded from the surface indicated that several scenarios may occur depending on particle diameters, grain-inclined angles from the surface, and hover altitudes.